CASTLE BIOSCIENCES INCCSTL

CASTLE BIOSCIENCES INC Earnings Per Share Disclosure

10-KFiled Feb 26, 20262 min read
(Loss) Earnings Per Share
Basic (loss) earnings per share is computed by dividing net (loss) income for the period by the weighted-average number of common shares outstanding during the period. Diluted (loss) earnings per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, vesting of RSUs and PSUs or purchases under the ESPP. The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents. Contingently issuable PSU awards are included in the computation of diluted (loss) earnings per share when the applicable performance criteria would be met and the common shares would be issuable if the end of the reporting period were the end of the contingency period. However, potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share when their effect is antidilutive.
The following table shows the computation of basic and diluted (loss) earnings per share (in thousands, except per share data):
Years Ended December 31,
202520242023
Numerator:
Net (loss) income$(24,158)$18,245 $(57,466)
Denominator:
Weighted-average common shares outstanding, basic28,986 27,776 26,802 
Assumed exercise of stock options— 457 — 
Assumed vesting of RSUs— 858 — 
Assumed vesting of PSUs— 144 — 
Assumed issuance of shares under the ESPP— 20 — 
Weighted-average common shares outstanding, diluted28,986 29,255 26,802 
(Loss) earnings per share:
Basic$(0.83)$0.66 $(2.14)
Diluted$(0.83)$0.62 $(2.14)
Due to the Company reporting a net loss attributable to common stockholders for years ended December 31, 2025 and 2023, all potentially dilutive securities are antidilutive and are excluded from the computations of diluted loss per share.
The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in our calculation of diluted (loss) earnings per share for the years ended December 31, 2025, 2024 and 2023 because to do so would be antidilutive. With regard to the PSUs, we assume that the associated performance targets will be met at the target level of performance for purposes of calculating diluted earnings per common share until such time that it is probable that actual performance will be above or below target (in thousands):
Years Ended December 31,
202520242023
Stock options2,913 2,445 3,319 
RSUs and PSUs4,084 531 3,350 
ESPP174 160 330 
Total7,171 3,136 6,999 
In connection with our acquisition of AltheaDx, Inc. (“AltheaDx”) in April 2022, we agreed to pay up to an additional $75.0 million in cash and common stock upon the achievement of certain commercial milestones for the IDgenetix test during 2022, 2023 and 2024. The milestones required to trigger these additional payments were not met in any of those years. As a result, no cash payments were made, and no shares of common stock were issued or excluded from the calculation of diluted (loss) earnings per share during those years.
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Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2020Mar 11, 2021

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

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